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I’ve been thinking a lot about this “entrepreneurial” thing of late.

One of the enduring challenges, sometimes the primary challenge, of working on your own, is knowing how to discern the predators and make sure you protect yourself from them, or stay out of their way. Whatever their motives, sometimes without motive — you’re just collateral damage — they can inflict serious harm to your income, your confidence, sometimes your reputation.

An an entrepreneur, without an excellent credit score, you’re toast. If people don’t pay you, (on time or ever) and you’re late paying your bills, kiss your excellent credit score goodbye. Bottom of the food chain, baby.

Welcome to planktonworld!

I learned this sad lesson when I was only 19, still in college, and working freelance like a madwoman to make as much money as possible; I lived alone and paid my way through university. One of the magazine publishers — this happens a lot, I would see over the next few years — screwed a bunch of us out of earned income for work used. We had to sign some “we won’t sue” document to collect pennies on our pay.

I ran into this guy at some party a few months later. Silly me! I thought he was…broke! I had pictured him wearing a barrel, begging for apples on the street, living in his car. Hah! Useful and memorable lesson. In the fall of 2008, two magazines in the space of two months tried, again, to screw me out of more money. Thank God for lawyers!

I recently heard — chutzpah! In the heartland! — from another deadbeat publisher who I had to sue to get my money from. Turns out I gave her all rights to my unpublished material in so doing (about four stories) so she made out like…a bandit. Now she asks if I’d like to work with her again.

See: snowball, hell.

Every single person who works for themself, for now or forever, needs to know these.

Sharkproofing 101

1) Join every possible professional group in any way related to your field, specialty, industry: alumni groups, LinkedIn groups, professional organizations. Even if you’re a fresh grad with no connections, make some, today. They have listservs and newsletters and on-line forums and chat rooms where pro’s will dish freely and name names. How else will you know who to avoid?

2) Because knowledge — of the deadbeats and cheaters — is power. For fear of being sued, very few professionals will name names publicly. But, for example, within the American Society of Journalists and Authors (on whose board I sit), we have a Warning List, available only to our members. Several Very Big Magazines are on there so we know not to bother working with them. It costs a fat $200 a year to join ASJA; saving your butt, if you meet our qualifications, is surely worth $16.66 a month. Freelance Success is also a great resource.

3) Know a lawyer who will answer your email and call promptly. Use them whenever necessary.

4) Keep an excellent FICO score and five-figure, low-interest line if credit open and available to you at all times. I am about to ditch Chase — hellooooo? — for their appalling, greedy new habit of charging me $30 every time I access my line of credit. The one they already cut and won’t restore and charge me double-digit interest on — and, wait there’s more! — told I was lucky it was only $30. After $90 in charges in one week, I took this issue to TD Bank where a banker said, “Hm. Sounds like extortion to me.” You have clout, use it.

5) Attend conferences and parties and events, nay, even the opening of an envelope in your industry — or the one you are trying to break into. You need to meet as many people as possible because some of them, yes, are going to be lying cheats — and some are going to be amazing, kind, cool mentors. The latter will help you suss out, or recover from the flesh wounds of, the former.

6) Be a lovely person. I mean it. Kind, funny, generous, helpful. What’s in it for you? Karma, baby. When the next deadbeat bites your ass and that line of credit just got cut and no one is hiring — you’re going to need a friendly voice on the phone or Facebook. I recently got asked for help by someone very new to me. Sigh. I have very little free time and a crummy income. Can I afford it? Can I afford not to? When it’s just you and your Blackberry and your sweatpants and a lot of prayers and talent, you need backup. We all do. If you’re likeable and have freely given it before, and now ask for help, odds are you’ll get some.

7) Create a posse. The minute I heard True/Slant was…mutating….I called three smart, tough, savvy friends, one of whom I’ve never actually met face to face. They have been advising me since. Corporations and non-profits have boards of directors. This is yours. Like all boards, they add a fresh perspective, multiply your brainpower and, occasionally, talk you off the window ledge.

LAST year was a fabulous one for entrepreneurs, at least according to the Kauffman Index of Entrepreneurial Activity released last month by the Ewing Marion Kauffman Foundation. “Rather than making history for its deep recession and record unemployment,” the foundation reported, “2009 might instead be remembered as the year business startups reached their highest level in 14 years — even exceeding the number of startups during the peak 1999-2000 technology boom.”

Another surprise is the age of these new entrepreneurs. According to the report, most of the growth in startups was propelled by 35- to 44-year-olds, followed by people 55 to 64. Forget Internet whiz kids in their 20’s. It’s the gray-heads who are taking the reins of the new startup economy. And if you thought minorities had been hit particularly hard by this awful recession, think again. According to the report, entrepreneurship increased more among African-Americans than among whites.

At first glance, all this seems a bit odd. Usually new businesses take off in good times when consumers are flush and banks are eager to lend. So why all this entrepreneurship last year?

In a word, unemployment. Booted off company payrolls, millions of Americans had no choice but to try selling themselves. Another term for “entrepreneur” is “self-employed.”

The True/Slant model has been that of “entrepreneurial” journalist. Sounds so sexy. You’re in charge! Buying a big shiny desk! Minions! Interns!

Not so much. I photocopied my tax return from 2009 today because I’m asking my local YMCA for financial assistance to use their gym and pool, as I did (and received) last year as well. I lost my last staff job in June 2006, from the Daily News, where I was a feature writer. My income last year was 25 per cent of my staff salary. Yeah, I feel really entrepreneurial.

I am grateful for my partner’s staff job and his health insurance that covers me.

I’m forming a company this month, $1,200, as I finalize my book manuscript; I’ve been told to buy libel insurance as well. Those pesky little details of self-employment can add up to serious coin; I had to write my accountant a check for $395 for filing my 2009 taxes before we could start the next round of expenditures. He will allow me to pay that $1,200 over a few months, and I appreciate his kindness. Right now, my income from T/S ends in 28 days and I have no work lined up.

I’ll find something. It’s what we do. You get good at bush-beating when it’s your only source of income. I’m one of millions of U6ers — the Bureau of Labor term for those who don’t even bother looking for a full-time job anymore.

But I’ve freelanced for years and have some good relationships, editors I’ve been writing for for years, sometimes decades. Millions of “entrepreneurs”, as Reich so eloquently points out, are toast. They didn’t choose that role and they don’t want it.

There is some bitter irony that while some workers get government-paid subsidy and retraining, most of us don’t. We have to re-tool on the fly, stitching our parachutes as we plummet.

“This is my investment in the future right now,” said Fabiana Lee, 26, an interior designer who lost her job in 2009. She has been selling at the Greenpoint market since its inception in October. After experimenting with cookies (too much competition), she has pared her offerings down to two: gorgeously browned empanadas and irresistibly twee “cake pops,” golf-ball-size rounds of cake perched on lollipop sticks. At the moment, they are her main source of income.

Young, college-educated, Internet-savvy, unemployed and hoping to find a place in the food world outside the traditional route, she is typical of the city’s dozens of new food entrepreneurs. As the next generation of cooks comes of age, it seems that many might bypass restaurant kitchens altogether. Instead, they see themselves driving trucks full of artisanal cheese around the country, founding organic breweries, bartering vegan pâtés for grass-fed local beef, or (most often) making it big in baking as the next Magnolia Bakery.

My single largest check this year is likely (I hope) to be a windfall, something I discovered through a lucky accident, and a helpful friend, over coffee at Christmas in Toronto with a former editor — a copyright lawsuit settlement in Canada. I hired (and paid) a researcher there to sniff out all my qualifying pieces, 132 in all. The maximum payout any one of us can get is $55,000. I doubt I’ll get anything like that, but it’s going to be a very welcome check.

We all, certainly the T/S crowd, know how difficult journalism has become as a primary source of income — I am struck, and saddened when I read emails or blog posts from young writers barely a few years into their careers who have already been canned, sometimes more than once; Michael Hastings, no graybeard, bemoans the sale of Newsweek, where he (precociously) has already worked.

What was once called, with chilling literalness, a hand-to-mouth existence has — ta-dah! — been reframed as ‘entrepreneurial.’ Sort of like calling a used car “pre-owned.” We were “pre-employed.”

About 40% of freelancers had trouble getting paid in 2009, according to a survey released in mid-April by the New York-based Freelancers Union, a 135,000-member organization for independent contractors across the country in fields such as media, technology, and advertising. It was the first year the group asked the question on its member survey. And more than three out of four freelancers said they’ve had trouble getting paid over the course of their careers, according to organization.

The problem could become more acute as independent contractors emerge as a more central piece of the work force. The financial crisis and the resulting high unemployment thrust many professionals into the ranks of freelance workers, which may continue to grow despite signs of an economic recovery.

Littler Mendelson, a San Francisco-based employment law firm with 49 offices nationwide, predicts that in 2010 half of previously eliminated positions filled will be filled by contingent workers—such as independent contractors, freelancers, and temp workers—accounting for as much as 25% of the work force nationwide— based on client interviews and a survey conducted by a staffing analysis firm.

Since independent contractors aren’t covered by most federal employment laws, they don’t enjoy the same legal protections on wages as permanent employees, says a spokesman for the Department of Labor. If a permanent employee doesn’t get paid, federal or state labor departments can fine companies and even prosecute company executives. But independent contractors often have to turn to the court system, in most cases small claims, if they go unpaid.

I wrote about this trend for The New York Times last year — after two publications did their level best to screw me out of almost $7,000 I’d earned. One owed me $5,600 and sent me emails telling me of their financial troubles. Like I care. If I can run my business efficiently, so can you. I found a contingency lawyer, sued and won half (the lawyer, sad to say, took a third of that.) I hired another lawyer — a softball buddy who helped out for two bottles of Stoli — whose letter to the other deadbeat produced payment within two days of his letter, after months of nyah-nyahing and stonewalling.

These losers always manage to pay for everything else — their office space, heat, light and gas for their vehicles.

Freelancers? Feh, they can wait.

No we can’t — not with credit lines restricted and credit card APRs now shooting through the roof. My bank is charging me $10 every time I use my overdraft protection (line of credit) — this in addition to the usurious interest rate they charge on the balance and cutting my line of credit from $20,000 to $15,000 — because…they can.

If someone isn’t paying you, sue their ass. Don’t “be nice.” You don’t want to burn every bridge, but some look much better in flames. If a client is screwing you and smiling, why would you want them anyway?

Interesting story in The New York Timesabout people who have been so burned by the recession, the vicious not-so-merry-go-round of hiring and firing they prefer not to have a full-time job:

What is known as “contingent work,” or “flexible” and “alternative” staffing arrangements, has proliferated, although exact figures are hard to come by because of difficulties in tracking such workers. Many people are apparently looking at multiple temporary jobs as the equivalent of a diversified investment portfolio.

The notion that the nature of work is changing — becoming more temporary and project-based, with workers increasingly functioning as free agents and no longer being governed by traditional long-term employer-employee relationships — first gained momentum in the 1990s. But it has acquired new currency in this recession, especially among white-collar job seekers, as they cast about for work of any kind and companies remain cautious about permanent hiring.

In just one snapshot of what is going on, the number of people who describe themselves as self-employed but working less than 35 hours a week because they cannot find full-time work has more than doubled since the recession began, reaching 1.2 million in December 2009, according to the Bureau of Labor Statistics. Economists who study flexible work arrangements believe that the increase has been driven in large part by independent contractors like Mr. Sinclair and other contingent workers, struggling to cobble together whatever work they can find.

As the economy continues its halting recovery and employers’ confidence remains shaky, economists believe that it is likely that the ranks of these kinds of workers will continue to grow.

I recently spoke to a class of journalism students at Emerson College in Boston. The night’s final question, technically off the topic of my visit (ethics) was striking: “Aren’t you freaked out by not having a job? Being freelance all the time?”

No.

Like these people in the Times piece, I’ve been laid off from a few jobs, instantly and, a few times without clear warning, severed from well-paid work I enjoyed in my field. For me to sign up again, willingly and with a real sense of excitement, I’m not sure which employer would be The One. Loyalty doesn’t matter. Seniority, nope. Multiple graduate degrees? Not those either. The only protection against being canned, and falling deep into poverty, is saving the biggest amount of cash you possibly can and keeping your overhead as low as you and your loved ones can tolerate.

I was lucky in growing up in a household where no one ever had a “real” job — i.e. a steady, solid paycheck, a pension, paid sick days or vacation. Everyone worked as a creative freelancer: film, journalism, television. You live check to check. You get to know a really good accountant and try very hard not to get behind on your tax payments since it’s pay as you go. We drove (good) used cars, bought art and cashmere and plane tickets overseas in better years and enjoyed them in lean ones.

I learned young that even the best ideas you try to sell freelance can be ignored or stolen or shot down by people collecting paychecks because…they feel like it. They owed us no allegiance and we all knew the deal. It’s a painful and expensive lesson to learn instead mid-life and mid-career, as millions now have in the recession. Like a wave of bitter divorce(e)s, some of us aren’t eager to trot back up to the altar of full-time work. It’s too dangerous to put all your eggs in one basket.

Are you still in a full-time job? How secure — if at all — do you feel?

If you work for yourself, how’s that going? Do you feel more secure knowing it’s all up to you?

I’m the broad behind Broadside, Caitlin Kelly, a career journalist. photo: Jose R. Lopez You’re one of 16,136 followers, from Thailand to Toronto, Berlin to Melbourne. A National Magazine Award winner, I’m a former reporter and feature writer at The Globe and Mail, Montreal Gazette and New York Daily ... Continue reading →